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 A carbon tax the supply of electricity and gasoline and the demand for electricity and gasoline

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 A carbon tax the supply of electricity and gasoline and the demand for electricity and gasoline. O A. decreases; decreases B. decreases; does not change C. decreases increases OD. does not change; decreases Suppose that the carbon tax is set at 50 cents per litre. On the graph 1. Draw the new supply curve and label it S + tax. 2. Draw a point at the market equilibrium. Label it 1. 3. Draw a shape to show the deadweight loss with the carbon tax set at 50 cents per litre. A carbon tax achieves an efficient use of resources when it equals O A. marginal social cost B. marginal private cost c. marginal external cost D. marginal external benefit
Price and cost (cents per litre) 400 MSC a 350 3 300- S = MC 250- 200- 150- 100- D = MSB 50- 0+ 0 10 2 4 6 8 Quantity (millions of litres per month)